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Retail RETAIL Retail RETAIL The view from the shop floor tanding on the steps looking across the parking store in the city shortly before the lot towards the Zhejiang Exhibition Centre, the closures elsewhere. doorman of Hangzhou Tower Shopping City It’s clear that a large portion of points to the idle cars and says, "Look at the luxury sales in Hangzhou are now registrationS plates. Most of them are from outside driven by the tuhao (a Chinese term Hangzhou." Shoppers in for nouveau riche) travelling in from Hangzhou Tower is one of the city's largest and most Hangzhou used nearby towns and cities – where to be 'crazy', but high-end shopping destinations, showcasing international factory owners and their kin get rich now they've labels such as Louis Vuitton, Cartier and Armani, as well as and flaunt it. But as traditional become more domestic luxury brands like Shanghai's Yifei and Inner rational in their manufacturing is declining, the tuhao Mongolia's Erdos, which specialise in silk qipaos purchasing are becoming more frugal. (traditional figure-hugging Chinese dresses) and cashmere habits – so Meanwhile Hangzhou’s local 800,000 clothing respectively. Louis Vuitton opened its boutique business has shoppers are becoming more Size in square in the city in 2004, turning over Rmb400,000 ($62,500) slowed a little, discerning. As a staffer at Hangzhou metres of in its first four hours, and pioneering the way for other but it still seems Tower told us: "Shoppers in good Hangzhou’s luxury brands to follow suit. Hangzhou used to be 'crazy', but now high-end Mix However, sales haven't maintained that initial pace. they've become more rational in their City mall Luxury labels have been suffering weaker sales across habits – so business has slowed a which China, spurred by the slowdown in economic growth and “ little, but it still seems good." opened in the crackdown on corruption. In 2015 Louis Vuitton closed Hangzhou Tower actually consists 2010 three stores: in Guangzhou, Harbin and Urumqi. But the of four towers connected by brand evidently has faith in Hangzhou: it opened a new footbridges so that it straddles the 72 SINOPOLIS: HANGZHOU ” RETAIL Two Apple Stores Praising West Lake in the Rain Hangzhou’s flagship Apple Store was opened on Shimmering water on sunny days, Pinghai Road in January 2015, as one of five Blurred mountains through rainy haze; Apple Stores that the San Cupertino-based firm West Lake is like the beau ty Xizi: had pledged to open in China before the Spring With makeup heavy or light, she is always beautiful. Festival rolled around that year. The grand opening received much-appreciated attention from Apple (Xizi, also known as Xi Shi, is one of the Four Beauties of ancient China, and she lived in Zhejiang province. The West Lake is said to be an incarnation of her beauty, and sometimes CEO Tim Cooke, who made a big deal of the event will be called by her name.) by tweeting, "Starting Something New in Hangzhou, China!" Before its opening, the glass storefront was covered in paper, bearing a calligraphic rendering of the poem “Praising West Lake in the Rain” by the poet Su Shi (1037 – 1101). The calligraphy was performed by local master Wang Dongling, who says the piece reflects the city’s duality: “Hangzhou is a traditional city that has preserved the essence of ancient Chinese culture, but is also a modern city open to new ideas.” Certainly Apple thinks Hangzhou is a healthy market, being one of the three launch cities in China for its premium Apple Watch – designed in partnership with Hermès. The company promptly opened a second Hangzhou store last April. The second is located in the Mix City Mall. SINOPOLIS: HANGZHOU 73 RETAIL The leading malls in Hangzhou Hangzhou Tower Shopping City（杭州大厦购物城） • Opened: 1988 • Size: 140,000 square metres • Location: Wulin District, Wulin Square • Demographic: High-end Retail sales of consumer goods • International stores: Louis Vuitton, Dior, Armani, Cartier, Gucci Rmb billion % growth Retail sales Real growth Mix City/MixC Mall 万象城( 450 25 • Opened: 2010 383.9 • Size: 800,000 square metres 400 19.9 • Location: Qianjiang New CBD 18.7 353.1 20 • Demographic: High-end 350 15.8 294.5 • International stores: Prada, Hollister, Fe ndi, Louis Vuitton 300 254.8 15.5 15 INtime Department Store 银泰大厦( 250 214.6 • Opened: 1998 13.0 200 180.5 • Size: 51,000 square metres 10 • Location: Wulin District, Yan’an Road 150 8.7 • Demographic: Mid-high end • International stores: H&M, Clarks 100 5 IN77/Hubin 湖滨银泰( 50 • Opened: 2005 0 • Location: Hubin District, Pinghai Road 0 • Demographic: Mid-high end 2009 2010 2011 2012 2013 2014 • International : Gap, Forever 21, Gucci, Prada 74 SINOPOLIS: HANGZHOU RETAIL North Ring Road. Walking between the shops in the Singles’ Day – the caters to a broader range of desires, towers – which are all tenanted though quiet – the single largest with 40% of its free space given over constant competition between Hangzhou’s malls is shopping event in to food, drink, and entertainment apparent. Sinopolis is there just after Singles' Day – the the world – was (the top floor of this mall houses a single largest discount shopping event in the world – and commercialised cinema, which INtime boasts is the in Hangzhou whilst the stores in Hangzhou Tower weren’t offering closest cinema to the West Lake). “I got my story, promotional sales to mark the day, many advertised a Similar tenant diversity my dream from discount period from November 12 (the day after Singles' characterises the Mix City Mall America. The Day) to November 16. A shop assistant explained why: (MixC) – the second location this hero I had was “This isn't because of Singles' Day, this is because the mall brand has c hosen in China after Forrest Gump. INtime Department Store is celebrating its birthday, and success in Shenzhen. Opened in I’ve watched so we have to compete.” 2010, this gigantic complex only that movie INtime Department Store (also named Yintai Mall) has allots 40% of its occupied space to about 10 times. its main complex on Yan'an Road, which runs north to traditional shops: the rest is split Every time I get Hangzhou Tower and is the street purportedly with the between dining, entertainment, frustrated I highest retail rents. Similar to the towers, INtime sporting facilities and other services. watch that Department Store is divided into several, multi-storey MixC houses an Olympic size ice- movie” buildings, each with a specific target demographic – men, rink, which welcomed Olympians women and children. This mall is somewhat less high-end Shen Xue and Zhao Hongbo for the Jack Ma, the than its competitor to the north, featuring brands such as mall's lavish opening ceremony. boss of Alibaba H&M, Clarks and Mango. Understandably, perhaps, it However MixC's performance has and Hangzhou’s most famous appears busier. been less stellar. Revenue declined resident However it is not this INtime mall which is celebrating 12.5% in 2013 and 20% for the Spring its birthday. That is the INtime Mall at West Lake, further Festival period in 2015. During that to the south, which opened in November 2014. Compared period in 2015, for example, with its predecessor on Yan'an Road, the West Lake mall Hangzhou Tower found the going as SINOPOLIS: HANGZHOU 75 RETAIL A growing wine market Treasury Wine Estates’ China sales director for its wholesale division, Jack Wu, says the Australian wine giant began working with a new distributor in Hangzhou about six months ago. “That distributor has delivered exciting results,” says Treasury Wine Wu, adding that Hangzhou is the headquarters for all sales in Estates’ Jack Wu Zhejiang province. says Hangzhou He describes Hangzhou as a “wealthy market” and says already has an thanks to e-commerce and a strong private sector, there is entrenched already a very entrenched middle class. He adds that the middle class open people of Hangzhou tend to be smart and well-educated as to drinking well as discerning spenders. And because so many of its now being heavily promoted at a price-point just below foreign wines citizens have relatives that live or study abroad, he believes Rmb300 (or $45.62, which Wu says is a watershed for there is widespread interest in foreign brands. categorising a wine as luxury or affordable). His distributors, Among the 10 local Chinese markets in which Treasury he says, are making much of the fact that the number 28 has distributors, Wu forecasts the Hangzhou/Zhejiang partner sounds in Mandarin like ‘love’ and so this is also a perfect will be one of the top performing within the next two years. choice for celebratory dinners. Part of the reason is the company’s strategy of pushing more Wu’s upbeat view on wine sales in Hangzhou offers a affordable wines from its portfolio to target middle class proxy of sorts for the city’s overall retail market. It indicates consumers and newer wine drinkers. Treasury’s pricier wines that while the luxury end of the market may face tougher include Penfold’s Grange and Stag’s Leap, but the product set times, brands that target the growing middle class with to see the strongest sales may be Penfold’s Bin 28, which is affordable, high quality products are best placed. 76 SINOPOLIS: HANGZHOU RETAIL Online or offline? Hangzhou is commonly considered as China’s capital of e-commerce, in part due to its status as the home of Alibaba Group. Amongst other things, Alibaba is the mastermind behind the commodification of Singles’ Day – celebrated on November 11.
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